Trade secrets only have value as long as they stay secret, so once they come into a competitor’s hands or become publicly available, their value is often destroyed.
Few employees realize that when they take their employers’ trade secrets with them prior to leaving their job they may be exposing themselves to criminal liability under the Economic Espionage Act, which makes it a crime to steal trade secrets when (1) the information relates to a product in interstate or foreign commerce (which is virtually any product now days) or (2) the intended beneficiary is a foreign power.
The Fifth Circuit Court of Appeals recently considered whether a travel agency’s noncompete agreement with its employee was enforceable under Texas law. It concluded that because the agreement did not have geographic limits, was not limited to the travel agency’s customers with whom the employee actually worked during her employment, and included entire travel agency industry, the non-compete was unenforceable.
More and more states are amending their non-compete statutes to make them more employee-friendly. This trend, spurred by the White House report on the effect of non-compete agreements on competition and the revelation that some of the largest employers, like Jimmy John’s and Amazon, were requiring their sandwich-makers and warehouse employees to sign non-compete agreements, has continued into 2018.
Last Tuesday, Stormy Daniels, a porn star, sued President Trump seeking to declare her 2016 confidentiality agreement with him unenforceable and void so that she can tell the world about her affair with the President back in 2006. Here’s why she may lose.
A court order prohibiting defendant from using trade secrets must be broad enough to cover all possible circumstances while narrow enough to include only the illegal activities. Where that line lies depends on the circumstances of each particular case.
What a lot of companies do not realize, however, is that if they wait too long to ask for an injunction after finding out about the employee’s competitive activities, a court may deny their request simply because they waited too long
The business world is littered with the carcasses of companies which, after they shared their confidential information and trade secrets with a non-competitor, such as their client, supplier, or vendor, were undercut by that party, who all of a sudden realized that they could profit from the information by cutting out the middle-man.
The Tax Cuts and Jobs Act prohibits companies from claiming tax deduction for confidential settlements paid for sexual harassment and abuse and the related lawyer’s fees.
Any Texas companies that have employees who primarily work and reside in California, should update their non-compete agreements with such employees to meet the requirements of the California Labor Code Section 925.
Texas courts have issued several interesting opinions in 2017 regarding Texas non-compete law, explaining and defining when the Texas Covenants not to Compete Act applies and clarifying procedural mechanisms and remedies in non-compete disputes.
The Fifth Circuit recently considered whether the federal copyright and patent laws preempt (trump) Texas common law claim of unfair competition by misappropriation.